TRD Takes Brooklyn’s Pulse

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While Elliman and Corcoran have just released their 3rd Quarter reports on Manhattan, the current issue of The Real Deal that just dropped has an exhaustive analysis of the Brooklyn real estate market—so exhaustive that it’s hard to pick out just a few snippets here. Here’s some top-level stuff:

Overall, the median closed sales price in Brooklyn has already fallen back to 2005 levels, dropping 19 percent over the past two years, according to StreetEasy. Rental listing prices dropped 12 percent over the past year, not including all of the concessions landlords are throwing in these days. Meanwhile, a city tally early last month found that Brooklyn had more stalled construction sites than any other borough with 214 — a stunning 47 percent of all 448 projects citywide.

What else? Robert Knakal predicts prices have another 5 to 10 percent to fall, and another professional market watched looks on the bright side of things when he says, “it’s not going to be the end of the world if these [new condo developments] start selling at discounts. It’s going to provide much-needed affordable housing for the middle class, which doesn’t really exist right now.” In the neighborhood-by-neighborhood breakdowns, Williamsburg comes out looking in the worst shape in terms of distressed properties and supply glut. Still, even Park Slope has its share of bad news: The number of transactions there fell by almost half over the past year and listings prices are down 25 percent since 2007. Read on.
Toppling the King [The Real Deal]

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  • daveinbedstuy

    This is not unexpected for new condo developments. I’d love to see an analysis that looks at them by the reputation/experience or history that particular developers have been in the market. I’m sure some are doing very well because of the quality aspect of the developer.

  • i don’t think there’s much in the article that regular readers here didn’t already know.

    for me a big question would be how a significant decline in new condo prices, when they ultimately come, will effect seasoned condo prices and TH. at some point relative strength in price gets undermined by really much cheaper alternative.

  • “according to Streeteasy”? really? isn’t there better info out there?

    Anyway, sounds right to me. I think the condo market is down way more than 20% and the choicer co-ops and THs in the choicer neighborhoods off somewhat less than that.

    To answer antidope, if the condos market gets low enough, I wouldn’t mind making the move myself. If it means cutting the price on a co-op, so be it. Wherefore art thou, Love Lane and Henry Street?

  • doesnt really matter how low prices go, there’s still not enough people out there with the monies for most of it, so in the end youre still going to get the riff-raff buying “cheapER” condos but still stretching their budget that they can barely afford. salaries have not gone up at all and everything ELSE in life is much more expensive.

    *rob*

  • Where are the wall street crooks with their fat bonuses (that our tax dollars paid for through the TARP) to come in to drive prices further out of the reach of ordinary working families who pay taxes?
    Obama sucks. I should not have voted for him. He is just George Bush light.

  • In the end it’s all driven by the employment numbers and I don’t see those recovering in the next year or 2. After 2001 recession employment numbers took more than 2 years to bounce back and we are not even done yet slashing payrolls. Add a glut of new condos and you get a pretty dim picture. No wonder real estate in NYC is tagged as depreciating asset by the banks these days.

  • From NYS Dept of Labor website:
    “Over the last 40 years, there have been seven distinct recessions (including the current economic downturn) in the U.S. and New York State. Recessions in New York have tended to be significantly longer than their national counterparts. This trend has become more pronounced over the past 20 years. The last three recessions in New York State (dating back to 1981) have averaged more than 2½ years in length, while the last three national recessions have averaged less than one year in duration.”
    Markets with unconstrained and excessive supply, such as Williamsburg, will not fair as well as substaintally built out and established landmark designated districts such as Brooklyn Heights, Cobble Hill, Fort Greene, etc.

  • Park Slope volume half off peak. Park Slope prices quarter off peak. You will not get a price bottom until volume rebounds. Volume leads prices. This is very “bad”.

    ***Bid half off peak comps***

  • loty I agree. compare 2010 to 2004. Unemployment is up from 5% to 10%, 150,000 wall street jobs are gone, new Condo inventory and shadow inventory is up by god knows how much.

    Yet… home prices are twice as high. and stubborn. I think there is some “shadow demand” made up of people who were priced out for a few of the peak years, and they are falling for what look like bargains as their patience runs out. I think as the prices slip for another year it’s going to become clear that their numbers are not strong enough to support the market.

  • Small problem with some of the data.

    It says that 116 units of inventory are for sale in Park Slope at 500 Fourth Avenue.

    One problem…500 4th Avenue isn’t in Park Slope, to the best of my knowledge. Neither is Argyle or probably a couple other places on 4th Avenue with inventory that they are attributing to Park Slope and not to the proper neighborhoods of Gowanus/Boreum Hill.

    Take away those units which are not actually IN Park Slope, and the inventory is significantly less.

  • “This is not unexpected for new condo developments.”

    Brownstones and prewar coops neither.

    “Markets with unconstrained and excessive supply, such as Williamsburg, will not fair as well as substaintally built out and established landmark designated districts such as Brooklyn Heights, Cobble Hill, Fort Greene, etc.”

    Yes they will. Half off accross the board. Supply, quality and landmark designation were factors already built in before hot-potato/Ponzi credit. Everything up 200%, everything will be down -50%. The recent 3-month snapshot of NY Case-Shiller will fool a lot of people. That is, if the banks let it.

    ***Bid half off peak comps***

  • fellas. “fare” as well. not “fair” as well.

    I don’t get why everyone thinks brownstones are immune, except for the fact that a lot of the posters own them. Has everyone forgotten about the concept of a “substitute”? If the price of a condo goes down enough, it will pull the marginal buyer out of the brownstone market. if the price of “south slope” falls enough, it pulls the marginal buyer out of the north slope. The borders don’t matter much. You could make a strong argument that the border of PS321 at Union street, within the slope, matters more than the border of park slope south at 9th street. Even excess supply in Yonkers has an effect on park slope prices. You’re dealing with a macro trend. you can’t argue these points by getting snarky about neighborhood boundaries.

  • What joe said but considering rents as well. Rents are included in the “building blocks” of prices. Prospective tenants care less about pre-war charm than do prospective buyers. Take enough “rental blocks” out and…JENGO!!!

    And judges are very simpathetic to deadbeat renters in NYC. This risk, coupled with the unemployment rate, will be increasingly credited off contract prices as we go forward.

    ***Bid half off peak comps***

  • BHO – across the board? Really?
    From TRD piece:
    “The largely landmarked district comprised of Dumbo, Brooklyn Heights, Boerum Hill, Carroll Gardens and Cobble Hill had the smallest median sales price decline over the past two years, at 7.5 percent. The area also saw one of the smallest declines in rental listing prices over the past year — 4.7 percent.” “New development didn’t dominate the market, so as a result you didn’t have as large of a drop,” Miller explained.

    How will these neighborhoods catch up to those that have already experienced significantly greater declines in price? Is volume a factor in these thinly traded, no-new-supply, landmarked districts? These same neighborhoods experienced the least amount of appreciation during the run up. I am sincerely interested in how you see your across the board half off peak scenario playing out.

    A claim of half off peak for all sub-markets, landmarked or not, infers that there is no distribution of adjustments. Only a data set containing one point of data would fit that model.

  • “A claim of half off peak for all sub-markets, landmarked or not, infers that there is no distribution of adjustments. Only a data set containing one point of data would fit that model.”

    I don’t follow that paragraph but my sense (attention to prices in Park Slope, Brooklyn Heights, and Fort Greene over the years) as well as Case-Shiller data tells me that everything more or less tripled in value.

    The hoods that have already experienced significant declines ahead of the average are those of low-income so-called minorities. Last hired, first fired, first foreclosed, first force-sold. All sub-markets will not necessarily collapse in lockstep. Brooklyn Heights residents have deeper pockets and older money and can deny a little bit longer than a marginal owner in Bed Stuy.

    Not everything must sell but whatever does will be marked to a brutal market. The high and low tide of Ponzi finance floats all boats.

    Can you please elaborate on that paragraph I quoted?

    ***Bid half off peak comps***

  • datum set !

    BHO, that paragraph is quite clear reading.